Energy-industry insiders will recognize that this year’s landscape of legislative action is strikingly similar to past sessions. As expected, multiple states have filed bills addressing reduced-income customers contracting with energy suppliers; there are renewable energy bills in every state that target new sustainability and efficiency goals; and there are a number of bills looking to restructure elements of public utility administration such as billing options, price transparency, and enhanced website visibility. One bill that got significant attention from industry watchers was the bill in Missouri proposing to phase-in a full retail electricity market.
Many states wrapped up their sessions in April but there are a number of bills that P.R. Quinlan is still tracking; the 2023 session may be a bellwether in retail energy trends as we see legislators open to bringing to new choice markets at the same time that rules tighten in legacy competitive states.
Retail Energy Expansion
While there is unlikely to see any resolution this term, it is very encouraging to see Retail Energy Choice expansion pending in a few markets. Earlier this year a bill was introduced in the Missouri House to create the “Electrical Choice and Competition Law” which would require the Missouri Public Service Commission to allow commercial and industrial customers, as well as eventually residential customers, the option to choose a retail electric supplier. This is a “dream scenario” retail choice bill in a brand-new market, which has the support of a number of retail energy suppliers and brokers interested in opening up Missouri to retail choice. Positively, in its second year of consideration by the legislature, the bill was assigned to a committee and given a hearing though it was ultimately not favorably reported. The sponsors of the bill are likely to bring it up for a third time in 2024.
Public Utility Administration
Connecticut has multiple bills pending before committees that seek to remove Public Utilities Regulatory Authority from the Department of Energy and Environmental Protection’s oversight, or conversely, bifurcating DEEP into two separate entities: a Department of Energy, and a Department of Environmental Protection. Often the goals of what traditionally are separate agencies conflict, therefore this is a reasonable move by legislators to ensure that policy goals are able to be fully developed without the yoke of contradictory priorities. At this time, none of the referenced bills have been moved out of committee so it is unlikely to see any additional movement this session. Virginia enacted legislation that puts utilities under the oversight of the State Corporation Commission, with utilities being subject to bi-annual reviews of their rates, terms, and conditions for generation, distribution, and transmission services. As introduced, the bill that was eventually signed into law, had a provision effectively eliminating any energy choice options for consumers. While the retail energy market is quite small, it will continue to exist for at least another legislative session.
Supplier Issues
Connecticut has advanced a bill favorably out of committee that would give PURA greater authority over utilities ability to recover cost recovery through rate cases, limit the use of settlement agreements in rate cases, as well as requiring entities appealing a civil penalty to provide the fees in escrow before the enforcement would be stayed. This bill requires entities appealing a PURA civil penalty to provide the penalty amount in escrow or another surety before PURA stays enforcement and must meet certain threshold which would directly affect suppliers.
Over the last few years legislatures have put into law regulations addressing suppliers working with energy consumers below a certain income threshold. Connecticut currently prohibits hardship or low-income customers from shopping for a retail electric supplier. The bill currently pending would return the right to customers would and open up new opportunities for them and retail suppliers. As it is sponsored by a Republican legislator in the minority party, no advancement is expected, but the fact that it was even introduced in a state that is increasingly hostile to its choice market is notable.
Renewables & Energy Efficiency
Nationwide, across all industries, there is a continued effort to transition to greener options, with the energy industry continuing its trend of moving towards more and more ambitious carbon neutral goals. The Washington, D.C. City Council has passed and is in the process of implementing its Climate Change Prevention Act which has significant emissions targets for 2025 – 2050. There is expected to be an impact on energy market regulations as the implementation moves into place. The DC Council also passed the Local Solar Expansion Amendment Act that will maintain the Solar Alternative Compliance Payment (“SACP”) at $500/MWh and raise the solar carve-out of the RPS from 10% to 15% by 2041. A number of states have expanded net metering bills currently pending; however, one interesting outlier is the new law signed by Delaware’s Governor Carney, that has reduced the financial value of net metering to customers. The new state net metering law prohibits utilities from reimbursing, crediting, or otherwise remunerating net energy metering customers for any “Excess kWh Credits” at the end of the annualized billing period and requires “Excess kWh Credits” to revert to the electric utility at the end of the annualized billing period. Maryland’s Governor signed into law two bills that require the MDPSC to establish a method for calculating the value of certain accrued net excess generation; requiring that a subscriber of a community solar energy generating system accrue virtual net excess generation in the same manner as certain other eligible customer–generators. The ability for customers to apply accrued excess generation could have financial benefits.
P.R. Quinlan will continue the monitor those states that are still in session, and have relevant energy choice bills before their legislatures. Overall, this past session has illustrated that the perspective of states is to recognize the important role that energy choice can play and the value it can bring to consumers.
For more information about a trial subscription to our comprehensive retail energy policy service, the Strategic Update for Retail Energy, or for any other questions, please email us at hello@prquinlan.com.
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